Administrative – Liquor License – Nonprofit Corporation – ‘Bona Fide Guest” – Prior Arrangement

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South Carolina Department of Revenue v. Blue Moon of Newberry, Inc. (Lawyers Weekly No. 010-027-12, 8 pp.) (Kaye G. Hearn, J.) (John W. Kittredge, J., joined by Jean Hoefer Toal, Ch.J., dissenting) Appealed from Richland County Administrative Law Court (Carolyn C. Matthews, ALJ) On writ of certiorari to the Court of Appeals. S.C. S. Ct. Click here for the full-text opinion.

Holding: Where a regulation defines a “bona fide guest” as one who accompanies a member or makes prior arrangements with a member, a sports bar did not violate the regulation when it gave a member’s telephone number to a non-member and admitted the non-member as a guest moments after he called the number.

We reverse our Court of Appeals’ ruling that the sports bar violated the regulation.

Facts

State Law Enforcement Division Agent Ford, who was not a member of the sports bar, tried to enter the bar. The bouncer refused him entry but pointed to a sign and said Agent Ford would be allowed to enter if he called the number on the sign.

Agent Ford called the number, and a member/employee of the bar answered. Although Agent Ford had no prior relationship with the member, the bouncer allowed him to enter after he made the call.

Once inside, Agent Ford bought an alcoholic beverage and consumed a small portion of it.

Analysis

1 S.C. Code Ann. Regs. 7-401.4(J) allows alcohol consumption on the premises of private, nonprofit organizations by members and their bona fide guests. The regulation limits “bona fide guests” to “those who accompany a member onto the premises or for whom the member has made prior arrangements with the management of the organization.”

The Department of Revenue contends the term “bona fide” implies that the guest have some degree of familiarity or camaraderie with the member or an allegiance to the organization’s purpose. However, the plain language of the regulation contains no support for this, and the ordinary definition of “bona fide” does not require it.

Under the Department’s view, each private club’s guest policy would be subject to the uncertain whim of the Department as to what threshold of connection is necessary. This would be of little comfort to organizations which are trying to ensure their practices comply with controlling regulations.

The bar complied with the plain language of the regulation, and we are not in a position to judicially engraft the requirements sought by the Department. We realize that the plain language of the regulation may permit some organizations to push the envelope on what it means to be “private”; however, we are not convinced this result is so absurd that we can ignore the regulation’s plain language.

Based on the literal terms of Reg. 7-401.4(K), Agent Ford was a bona fide guest because a member made prior arrangements with management. If the Department desires stricter standards, it is at liberty to revise the regulation accordingly.

Dissent

(Kittredge, J.) Construing Reg. 7-401.4(K) as giving Agent Ford the imprimatur of a bona fide guest would eviscerate its purpose.

The agency’s interpretation of Reg. 7-401.4(K) is not only entitled to deference, but it is also in accord with common sense when applied to the facts of this case. Moreover, the agency’s interpretation of the regulation is consistent with the S.C. Constitution.